Could January’s crypto ‘winter’ actually be here to stay
The month of January has spooked the market amid a larger sell-off that has kept the sentiments damp. As per the latest CryptoCompare report, Bitcoin and Ethereum fell by 23.3% and 36.9%, respectively, during the month until 27 January.
Most of the tokens were trapped in a downward spiral after their November peaks. Several reasons are thought to be behind the prolonged winter in the crypto-space. The Fed’s tapering announcement and fear of interest rate hike followed by the Bank of Russia’s anti-crypto stance, the SEC’s clampdown on spot ETFs, and wider market weakness. The report stated,
“Macro sentiment around risk-assets has been the leading narrative in the markets, with expectations of significant tapering of quantitative easing following a record 7.0% annual CPI inflation figure coming out of the US in December 2021.”
Galina Likhitskaya, Vice President of Operation & Products at HashEx, told AMBCrypto that the current situation is very different from the events preceding the last crypto-winter. However, she did note that we have already seen a similar fall in 2021 back in May, June, and July. Following the same, Likhitskaya mentioned, “an even more rapid growth of the crypto industry began.”
It is worth noting that the fund flows have also been negative since late December. The report found that the average weekly outflows reached $88 million. And, January saw the highest outflow to the tune of $207 million in the first week against the outflow of $238 million in the first week of June. While BTC led the outflow chart, Solana managed inflows during the period, the report noted.
If we look at the CoinShares’ weekly flow report till 21 January, altcoins like Cardano, Polkadot, and Solana saw inflows totalling $1.5
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